Intel Goes Mobile – Again

Founded over 40 years ago, Intel (NASDAQ: INTC ) long had an uncanny ability to
catch the big trends. But in the past few years, the company has fumbled
especially with smartphones and tablet PCs. Its offerings have been mostly too
expensive and cumbersome. And keep in mind that no smartphones use Intel
processors. Yet Intel still has tremendous research-and-development capabilities
as well as an extensive global manufacturing infrastructure. Certainly, the
company should be able to get some traction in the mobile industry, right? Well,
it finally looks as if there may be some hope. At the Consumer Electronics Show
this week, Intel CEO Paul Otellini gave a presentation about the companys new
Medfield processor. It integrates a CPU, RAM, storage and graphics capabilities
on one chip. In all, it can provide five hours of 3G Net access as well as six
hours of 1080-pixel video. Now, while the technology is strong, its not a
standout. But that may not matter because Intel has a lot of market power to
push things forward. In fact, its first deal is in China: Lenovo will sell
Intel-based devices. Then theres a deal with Motorola Mobility (NYSE: MMI ). The
plan is to launch phones and tablets in the second half of 2012. The reach could
be significant since Google (NASDAQ: GOOG ) is acquiring Motorola. While these
steps are encouraging, they are really just experiments and so will likely have
only a minimal impact on Intel's revenues and profits. It will probably take a
few years to move the needle. The problem is that growth will continue in the
mobile space, benefiting players such as ARM (NASDAQ: ARMH ) and Qualcomm
(NASDAQ: QCOM ). No doubt, they will continue to consolidate their market
positions, making things even tougher for Intel. Keep in mind that Qualcomm is
taking a shot at the Microsoft (NASDAQ: MSFT ) Windows mobile market with its
Snapdragon S4 processor. So for investors, its hard to see any near-term
positive catalysts for Intel. If anything, the core PC business is likely to
remain stagnant which could be a drag on the stock price. Tom Taulli runs the
InvestorPlace blog " IPOPlaybook ," a site dedicated to the hottest news and
rumors about initial public offerings. He is also the author of